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American Economic Review Vol. 103 No. 3 2013

Forecasting the Recovery from the Great Recession: Is This Time Different?

Kathryn M. E. Dominguez1; Matthew D. Shapiro2

1 Department of Economics and Ford School, University of Michigan, Weill Hall, 735 S. State Street, Ann Arbor, MI, 48109, and NBER. · 2 Department of Economics and Survey Research Center, University of Michigan, Lorch Hall, 611 Tappan Street, Ann Arbor, MI 48109, and NBER.

Abstract

This paper asks whether the slow recovery of the US economy from the trough of the Great Recession was anticipated, and identifies some of the factors that contributed to surprises in the course of the recovery. We construct a narrative using news reports and government announcements to identify policy and financial shocks. We then compare forecasts and forecast revisions of GDP to the narrative. Successive financial and fiscal shocks emanating from Europe, together with self-inflicted wounds from the political stalemate over the US fiscal situation, help explain the slowing of the pace of an already slow recovery.

DOI
10.1257/aer.103.3.147
Volume
103
Issue
3
Pages
147-152
Language
en
Sources
bibtex:phds-export.bib openalex crossref

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